The Cyprus state-owned electricity company signed an agreement Friday for the final leg of a 1.5 billion-euro Israel-to-Europe power cable that should be operational by 2016.
The EuroAsia Interconnector twin-cable underwater link will have a capacity to carry 2,000 megawatts across 1,000 kilometres from Israel to Greece, via Cyprus, with a mere 1% loss, the project’s chief executive Nasos Ktorides said.
“We already have interest from western European utilities to buy future contracts of our electricity supply,” he said, adding that the feasibility studies in Israel, Cyprus and Greece should be completed earlier than the end of the year, as was initially planned.
Ktorides said that the memorandum of cooperation with the Electricity Authority of Cyprus will see the operator, DEH-Quantum Energy, expand into joint production with the Cypriot utility in order to export the surplus output beyond the island’s current needs of about 1200 MW.
“There is great demand in Greece that is a net importer of electricity, as well as the rest of Europe. Germany, as an example, will decommission its nuclear stations by 2020, calling for an additional demand of 20,000 MW,” he said.
Ktorides added that after the recent natural gas finds in offshore areas between Cyprus and Israel, “it makes sense to convert the gas to electricity and export the power as a commodity.”
“Despite some initial pressure (from Turkey), the project is built on very strong foundations. Israeli officials have embraced the project as one of national importance as it will secure their autonomy in energy and economic matters. They likened it to the ‘Exodus’ two thousand years ago,” he said.
EAC chairman Haris Thrasou said that this project, “which seems to be very realistic”, will also help the utility exert pressure on the government to proceed with a land-side natural gas terminal in seven to eight year, with a “fast track” interim option available to regassify liquid natural gas with 28 months.
“Cyprus will need about 1 bln cubic metres a year of natural gas. The terminal will have a design capacity of 20 bln,” Thrasou said, adding that the surplus production capability could be exported, west to Europe.
“Our local energy sufficiency will be satisfied before the installation of the cable project. General Electric and J&P-Avax are working hard to repair the damages at Vassiliko power station, with three more units coming online next year. By then, we wile have a safe margin of 15 to 20%,” the EAC chairman said.
The Vassiliko power station was decimated in a munitions blast at an adjacent naval base last July where an arms shipment from Iran headed to Syria was stored under extreme weather conditions.
“The cost of cheaper electricity will only become a reality after we start using natural gas to fuel the power stations. We will also add a sixth unit with an output of 220 MW in 2016, which will coincide with our plans to have an electricity surplus,” Thrasou said.
Ktorides, who heads the joint venture between Greece's Public Power Company PPC/DEH, Cyprus-based Quantum Energy and Bank of Cyprus, said that the operator will fully fund the 1.5 bln euro cost to build the cable, while revenue over the lifetime of the project is expected to reach 17.5 bln euros.
He added that the operator will also pay for the feasibility studies, while the EAC’s contribution to the whole venture will be production sharing and onland transport from the eastern to the western tip of the island.